The EU will establish a primary dealer framework for joint bond issuance to support its COVID-19 recovery fund, the EU budget and administrative commissioner said on Wednesday.

Johnannes Hahn, the EU commissioner, said the EU would launch a 750 billion euro issuance plan this summer to fund member states' COVID-19 recovery fund, some of which will be issued through auctions.

In bond auctions, banks act as primary dealers for borrowers to buy bonds and then sell them to investors, helping to build market liquidity.

Mr Hahn said the EU would set standards for the framework by mid-April, followed by tendering procedures. The auction will allow the EU to issue bonds with a maturity of less than a year.

"this will lead to more bond trading. In this regard, the impact of the euro on the international market will be further expanded. "

The EU joint issue has been hailed as a game-changing move because it means a sharp increase in the eurozone's highest-rated and most liquid financial assets, making the single currency more attractive to reserve managers.

Mr Hahn added that at least one rating agency was expected to be involved in the preparations.

30 per cent of the 750 billion euros of debt is planned to come from green bonds to finance environmental spending.

Mr Hahn said that while the EU was developing "classifications" or guidelines for climate-friendly investment, its own issuance would first rely on the guidelines of the International Capital Markets Association.

"from June to July this year, we need something to issue green bonds," says Mr Hahn. Classification may not be implemented until 2023 or 2024. "

Before launching the launch of the recovery fund, the EU will complete its current unemployment insurance plan to raise funds, and will issue two or three more bonds by May, raising about 30 billion euros.